Project delays have a huge cost, act swiftly

The completion of the Bogibeel Bridge in Assam by the Narendra Modi government, which fast-tracked the project after assuming power in 2014, should be a lesson on how to avoid delays in future projects. As is well known now, the star-crossed 4.9-km bridge took 200 months to complete for reasons ranging from funds crunch to the then Congress government’s apathy in 2004-14. It has caused the nation a huge loss as the project cost escalated from Rs 3,230 crores to Rs 5,900 crores It would be appropriate to fix responsibility on the people responsible for this delay. Maybe the Congress president needs to look into this if his attacks on the Prime Minister are to have any moral or ethical substance.

The Bogibeel Bridge delay is just the tip of the iceberg as overall projects worth Rs 12 lakh crores are either incomplete or have been facing delays. In the real estate sector alone, over 4.65 lakh units, worth over Rs 3.3 lakh crores, are facing delays with reasons ranging from getting project approvals to cash crunch faced by developers, and a slowdown in sales. In many cases it is third party contractors who are the real culprits as they either take up too many projects which they are unable to execute or run out of cash. In the case of Bogibeel, for instance, besides the funding delay, the unavailability of raw material and then its transportation through hostile terrain took time. The reasons for project delays would differ from project to project and state to state.

One can imagine the irreparable damage this has caused to the economy, specially to job generation. Union roads and transport minister Nitin Gadkari has said that projects worth Rs 10 lakh crores implemented by his department has given employment to one crore young people, so it isn’t difficult to calculate the huge number of jobs lost due to delays in projects worth '12 lakh crores. Alternatively, an investment of Rs 1,000 crores creates 50,000 to one lakh jobs directly or indirectly.

Since providing two crore jobs annually was the keystone of the Narendra Modi government’s 2014 manifesto and has remained just a jumla in the fifth year of his administration, the government has the option of following the E. Sreedharan route. He had completed projects on time and within the budgetary provisions. The man behind the Delhi Metro used the contractual and institutional approach, so the government could either try out his method or it should put Mr Gadkari in charge of getting these projects to fruition. The public-private partnership tried out in the case of upgrading Delhi and Mumbai airports and the Delhi-Gurgaon Expressway was plagued by cost overruns due to major delays.

Completing these projects will be a challenge for the Modi government, but it could earn Mr Modi significant political mileage given that the Lok Sabha elections are just around the corner.